Business & LicensingQuestion 1399 of 1605
For a home improvement contract, what is the maximum down payment a contractor may require?
a.50% of the contract
b.$5,000 regardless of price
c.There is no limit
d.10% of the contract price or $1,000, whichever is less
Explanation
Under B&P Code section 7159.5, the down payment on a home improvement contract may not exceed 10 percent of the contract price or $1,000, whichever is less. Larger down payments violate the license law.
Law Reference: B&P Code §7159.5Practice all 1605 questions free — no signup required.
Related questions on this topic
- A contractor advertises services. What must the advertisement generally include under the license law?
- An unlicensed person advertises for construction work. What must the advertisement state, and what work may it offer?
- A home improvement contract for $2,500 must be in writing and contain specified elements. Which of the following is a required element?
- The three-day right to cancel that must appear in certain home improvement contracts protects the consumer by allowing what?
- Who must be named on the contractor's license bond as the principal?
- Which of the following is required before the CSLB will issue an original license after the applicant passes the exam?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)